In 2017,Sanford Corporation purchases and places in service $2,410,000 of equipment for its manufacturing business.What portion of the $2,410,000 may Sanford elect to treat as a Section 179 expense?

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Quizplus · Accepted Answer

Section 179 is a tax deduction that allows for immediate expensing of certain business assets, including equipment. For 2017, the maximum amount that can be expensed under Section 179 is $510,000, with a phase-out threshold of $2,030,000. In this case, since Sanford Corporation only purchased $2,410,000 of equipment, none of it exceeds the phase-out threshold. Therefore, the company can elect to treat up to the full $2,410,000 as a Section 179 expense. The best choice is E, as it is the only option that is greater than the maximum Section 179 limit for 2017.

In 2017,Sanford Corporation Purchases and Places in Service $2,410,000 of Equipment